Credit demand versus supply channels: Experimental- and administrative-based evidence

Valentina Michelangeli, Jose-Luis Peydro and Enrico Sette

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: We identify the relative importance for lending of borrower (demand) versus bank (supply) factors. We submit thousands of fictitious mortgage applications, changing one borrower-level factor at time, to the major Italian online mortgage platform. Each application goes to all banks. We find that borrower and bank factors are equally strong in causing and explaining loan acceptance. For pricing, borrower factors are instead stronger. Moreover, banks supplying less credit accept riskier borrowers. Exploiting the administrative credit register, we show borrower-lender assortative matching, and that the bank-level strength measure, estimated on the experimental data, determines credit supply and risk-taking to real firms.

Keywords: credit; banks; mortgages; SMEs; risk-taking (search for similar items in EconPapers)
JEL-codes: E51 G21 G51 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-ban, nep-eur, nep-fdg, nep-isf, nep-mac and nep-ure
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https://www.econstor.eu/bitstream/10419/242124/1/C ... -Sette-July-2021.pdf (application/pdf)

Related works:
Working Paper: Credit demand versus supply channels: Experimental- and administrative-based evidence (2021)
Working Paper: Credit Demand versus Supply Channels: Experimental- and Administrative-Based Evidence (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:242124

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